[shasta]

> The reason is quite simple. As inequality gets more pronounced, a larger fraction of the population faces more stringent budget constraints, and the spectrum of possible economic interactions open to them narrows.

That's pretty simple, alright. Gee whiz. It's a good thing we have those abstruse theories from physics to tell us that people without money don't buy as much stuff.

I'm guessing this is a case of bad journalism -- anyone have a better layman's explanation?

[Terr_]

"Poor people can't afford to wait for better deals", perhaps?

[nekopa]

I think the point of the article and the paper is to take that simple assumption and see exactly what level of inequality leads to effects on the larger economy. A number which we seem to be approaching.

[turbohz]

Interaction could also mean selling.